Occupational pension: the second pillar
Occupational pensions form the second pillar of the social security system in Switzerland. Comparis explains.
What is the purpose of the second pillar?
While the first pillar covers only basic living costs, second pillar savings, along with the third pillar, are designed to ensure you can maintain your usual standard of living after retirement. The compulsory occupational pension scheme therefore supplements the benefits provided by old age and survivors’ insurance and invalidity insurance when you retire and in the event of disability and death.
How is the occupational pension structured?
The occupational pension consists of a compulsory and a non-compulsory (voluntary) part. In the compulsory part, salaries that fall between the entry threshold (22,050 francs, as of 2024) and the upper limit (90,720 francs, as of 2025) must be insured. Contributions for the proportion of the salary above this limit are considered non-compulsory.
Who do occupational pension schemes cover?
Any employee who is obliged to pay social security contributions and receives a salary of at least 22,680 francs per year (as of 2025) must be covered by an occupational pension scheme. Between the ages of 18 and 24, your contributions cover the risks of death and disability. From the age of 25, you also save for your old-age pension.
Who is not automatically covered by an occupational pension scheme?
If you are not in paid employment, receive a gross annual salary of less than 22,680 francs (as of 2025), are self-employed or have an employment contract of three months or less, you are not automatically covered by a second pillar pension.
Entry threshold for occupational pensions
In order to be insured in the second pillar (occupational pension), you must earn an annual salary of at least 22,680 francs from a single employer (as of 2025). This minimum salary is referred to as the “entry threshold”. If your salary is less than this, you will not automatically be covered by a second pillar pension. If you earn 22,680 francs or more from multiple employers, you can make voluntary contributions.
Occupational pension: how the second pillar works
The capital saved in an occupational pension scheme is managed by public or private pension funds.
Who pays the pension contributions?
The employer pays at least half of the contributions to the second. pillar. The employee pays the other half, unless the employer covers some of the employee’s share as well. With the second pillar, a lower salary means lower pension benefits. Note that most pension plans will only continue to insure you if your salary remains above the set minimum of 22,680 francs (as of 2025).
Vested benefits accounts
If you leave your pension fund, your vested benefits can be transferred. This means that if you change employer, you will not lose any of your accrued savings. You can have the entire amount transferred to the pension fund of the new employer. If you do not move to a new employer after leaving your old company, you must transfer your pension fund assets to a vested benefits account. Find out more about vested benefits accounts and what you need to bear in mind.
Withdrawing occupational pension assets
When it’s time to draw your pension, you can choose between a lump-sum payment, a regular pension or a mixture of the two. You cannot change your mind later.
If you take early retirement, consider the fact that your pension benefits will be lower. You have the option of boosting your pension income by making up for any shortfalls or pension gaps.
Early withdrawal of pension savings
Under certain circumstances, you can withdraw your pension savings before you retire. For example, you can make an early withdrawal or pledge to finance a residential property that you will live in yourself. You can also withdraw funds from the second pillar before retirement if you wish to set up your own business or leave Switzerland.
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Compare vested benefits accounts: interest and key information
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Occupational pensions: the conversion rate and your pension
FAQs
Compulsory occupational pension/pension fund
Compulsory accident insurance
Vested benefits on leaving the pension scheme
Non-compulsory insurance in addition to occupational pension and accident insurance
The employer pays at least half of the contributions to the second pillar. The employee pays the other half, unless the employer covers some of the employee’s share as well.
The employer pays at least half of the contributions to the second pillar. The employee pays the other half. Only annual salaries of at least 22,680 francs per employer (as at 2025) are insured.
All employees from the age of 18 with a minimum annual income of 22,680 francs and a maximum of 90,720 francs (as of 2025) must be insured with an occupational pension. However, in the first few years of employment, only the risks of death and disability are insured. After reaching the age of 25, you also save for your old-age pension. Saving for your old-age pension continues until you give up employment or retire.
Who is not covered by an occupational pension scheme?
If you are not in paid employment, receive a gross annual salary of less than 22,680 francs, are self-employed or have an employment contract of three months or less, you will not automatically be covered by a second pillar pension. To be insured in the second pillar (occupational pension), you must earn an annual salary of at least 22,680 francs from a single employer (as of 2025). This minimum salary is referred to as the “entry threshold”. If your salary is less than this, you will not automatically be covered by a second pillar pension. People who reach the threshold through employment with multiple employers can make voluntary contributions.
You can find more information on the different life situations here.
In accordance with the Occupational Pensions Act (OPA), only a certain proportion of the salary is insured, not the entire amount. The coordination deduction is applied to ensure that the proportion of the salary already insured by the state pension scheme (OASI) is not insured again. It is deducted from the insured salary (annual income) and is currently 7/8 of the maximum OASI pension, which is 26,460 francs (as of 2025).
Retirement savings capital refers to the capital accumulated in the second pillar (occupational pension). It consists of the contributions paid in, the retirement savings credits and any additional voluntary buy-ins. Until retirement age is reached, the retirement savings capital accumulates interest at the minimum interest rate defined each year by the Swiss Federal Council.
A retirement savings credit is the amount credited to the retirement savings capital in the second pillar (occupational pension) each year. The rates are set as a percentage of the coordinated annual salary (insured salary minus the coordination deduction) and depend on the age of the insured person.
The law (OPA) defines which employees must pay into an occupational pension. It also establishes the minimum benefits that the occupational pension funds must provide. Salaries that fall between the entry threshold (22,680 francs, as of 2025) and the upper limit (90’720 francs, as of 2025) must be insured.